Inquiry into Vatican bank chief dropped
Italian prosecutors have dropped inquiries into the Vatican bank's former president, Ettore Gotti Tedeschi, after concluding a money laundering investigation that did implicate two of his juniors, judicial sources say.
Prosecutors accused the bank's director general, Paolo Cipriani, and its deputy director, Massimo Tulli, who both earlier resigned, of "authorising illegal financial transactions", the sources said.
A judge will now decide whether to proceed to a
trial of Cipriani and Tulli.
The two directors left the bank on Monday last week after the arrest of
a senior cleric who is accused of plotting to smuggle millions of euros into Italy from Switzerland.Gotti Tedeschi was ousted from the bank last year.
He said earlier he had been dismissed because he wanted more transparency, but the board of directors said he had neglected his duties.
The Vatican bank, known formally as the Institute for Works of Religion (IOR), has been a byword for opaque and secretive dealings for decades and its future has been in question since the appointment of Pope Francis in March.
Italian investigators believe the way the bank operated may have facilitated money laundering, according to a document summing up their preliminary inquiries that was leaked to Italian newspapers on Saturday.
Snowden: Western states in bed with NSA
Fugitive intelligence leaker Edward Snowden said the US National Security Agency operates broad secret spying partnerships with other Western governments now complaining about its programmes, in an interview published on Sunday.
Snowden said in comments made before his exposure of US espionage practices came to light last month and printed in German news weekly Der Spiegel that NSA spies are "in bed together with the Germans and most other Western states".
In remarks published in German, Snowden said an NSA department known as the Foreign Affairs Directorate coordinated work with foreign secret services.
The partnerships are organised so that authorities in other countries can "insulate their political leaders from the backlash" if it becomes public "how grievously they're violating global privacy", he said.
The interview was conducted by US cryptography expert Jacob Appelbaum and documentary filmmaker Laura Poitras using "encrypted emails shortly before Snowden became known globally for his whistleblowing", Spiegel said.
On cooperation with Germany's BND foreign intelligence agency, Snowden said the NSA provides "analysis tools" for data passing through Germany from regions such as the Middle East.
The US government has revoked the passport of Snowden, a former NSA contractor who is seeking to evade US justice for leaking details about a vast US electronic surveillance programme to collect phone and internet data.
He has been stranded at a Moscow airport for two weeks but three Latin American countries have now offered him asylum.
His claims about widespread US spying on Western partners have sparked uproar among European allies in particular and threatened to derail talks on the world's largest free-trade zone due to start on Monday.
German Chancellor Angela Merkel spoke with US President Barack Obama on Wednesday and agreed to a "high-level meeting" between US and German security officials in the coming days to address intelligence matters.
Brazil Target Of U.S. Spying, Globo Newspaper Reports
The U.S. National Security
Agency monitored the telephone and email activity of Brazilian companies and
individuals in the past decade as part of U.S. espionage activities,
the Globo newspaper reported on Sunday, citing documents provided by fugitive
Edward Snowden, a former NSA intelligence contractor.
The newspaper did not say how much traffic was monitored by NSA computers and intelligence officials. But the Globo article pointed out that in the Americas, Brazil was second only to the United States in the number of transmissions intercepted.
Brazil was a priority nation for the NSA communications surveillance alongside China, Russia, Iran and Pakistan, Globo said.
In the 10-year period, the NSA captured 2.3 billion phone calls and messages in the United States and then used computers to analyze them for signs of suspicious activity, the paper said. In the United States, the NSA used legal but secret warrants to compel communications companies to turn over information about calls and emails for analysis.
Some access to Brazilian communications was obtained through American companies that were partners with Brazilian telecommunications companies, the paper reported, without naming the companies.
The Globo article was written by Glenn Greenwald, Roberto Kaz and José Casado. Greenwald, who works for Britain's Guardian newspaper and lives in Rio de Janeiro, was the journalist who first revealed classified documents provided by Snowden, outlining the extent of U.S. communications monitoring activity at home and abroad.
After providing the information to Greenwald, Snowden fled the United States for Hong Kong and was most recently seen in the transit area of the Moscow airport.
Snowden's U.S. passport has been revoked. He has made asylum requests to several countries, including Ecuador, Venezuela and Bolivia. Three countries - Bolivia, Venezuela and Nicaragua - have offered to give Snowden asylum.
The newspaper did not say how much traffic was monitored by NSA computers and intelligence officials. But the Globo article pointed out that in the Americas, Brazil was second only to the United States in the number of transmissions intercepted.
Brazil was a priority nation for the NSA communications surveillance alongside China, Russia, Iran and Pakistan, Globo said.
In the 10-year period, the NSA captured 2.3 billion phone calls and messages in the United States and then used computers to analyze them for signs of suspicious activity, the paper said. In the United States, the NSA used legal but secret warrants to compel communications companies to turn over information about calls and emails for analysis.
Some access to Brazilian communications was obtained through American companies that were partners with Brazilian telecommunications companies, the paper reported, without naming the companies.
The Globo article was written by Glenn Greenwald, Roberto Kaz and José Casado. Greenwald, who works for Britain's Guardian newspaper and lives in Rio de Janeiro, was the journalist who first revealed classified documents provided by Snowden, outlining the extent of U.S. communications monitoring activity at home and abroad.
After providing the information to Greenwald, Snowden fled the United States for Hong Kong and was most recently seen in the transit area of the Moscow airport.
Snowden's U.S. passport has been revoked. He has made asylum requests to several countries, including Ecuador, Venezuela and Bolivia. Three countries - Bolivia, Venezuela and Nicaragua - have offered to give Snowden asylum.
IMF Chief Christine Lagarde Calls U.S. Budget Cuts 'Inappropriate'
Washington enacted across-the-board federal government spending cuts, known as sequestration, in March because Congress could not agree on an alternative.
It has meant everything from furloughs for air traffic controllers to fewer planes for the U.S. Navy to smaller subsidies for farmers.
"The budgetary procedure that is in place in the United States, which leads to a budgetary adjustment, seems to us absolutely inappropriate ... because it blindly affects certain expenditures that are essential to support medium and long term growth," Lagarde told an economists' conference in Aix-en-Provence, southern France.
Her comments echoed those last month from the IMF itself, which said: "The deficit reduction in 2013 has been excessively rapid and ill-designed."
In its annual check of the health of the U.S. economy, the IMF forecast economic growth would be a sluggish 1.9 percent this year. The IMF reckons growth would be as much as 1.75 percentage points higher if not for the rush to cut the government's budget deficit.
While the budget cuts that took hold on March 1 do not appear to be hitting government payrolls directly so far, some economists said they were weighing on private employers and helped explained a sharp slowdown in hiring in the health care and social assistance sector.
Lagarde urged Washington as well as Tokyo to come up with fresh plans to cut their debt.
Japan has pledged to halve the primary deficit the budget excluding new bond sales and debt servicing by March 2016 and bring it to surplus by March 2021 to contain its ballooning public debt. It will detail how it wants to accomplish that in a medium-term fiscal plan expected in August.
"It is indispensable that these countries indicate for the long and medium term predictable, credible fiscal policies, anchored in legislation that will not be challenged, which will bring the deficit down in a way that will reverse the debt trajectory to a downward trend," she said.
Bundesbank Chief: ECB Cannot Solve Euro Zone Crisis
The European Central Bank cannot solve the euro
zone crisis, Bundesbank chief Jens Weidmann told economists on Sunday, pressing
the bloc's governments to get their economies in shape and tighten their fiscal
rules.
Weidmann addressed an economists' conference in Aix-en-Provence, southern France, only three days after the ECB broke with precedent by declaring that it intended to keep interest rates at record lows for an extended period and may yet cut further.
"Monetary policy has already done a lot to absorb the economic consequences of the crisis, but it cannot solve the crisis," Weidmann said in his speech.
"This is the consensus of the Governing Council. The crisis has laid bare structural shortcomings. As such, they require structural solutions."
Weidmann, widely recognised to be the most hawkish member of the ECB's 23-man Governing Council, does not want the bank to intervene too strongly in tackling the bloc's economic crisis, thereby allowing governments to soft-pedal reforms.
He spoke a day after fellow ECB policymakers Christian Noyer and Benoit Coeure said the bank's decision to abandon its customary insistence that it never precommits on policy was a change in communication but meant no change from its strategy, which is based on monitoring inflation, real economy and monetary developments.
"The euro zone is on the mend, it must be at peace, protected, be allowed to heal," Coeure told the same conference on Sunday to explain the ECB's decision to issue such forward guidance, while urging governments to tackle structural problems.
The EU's top economic official, Olli Rehn, welcomed the ECB's move, saying the step - taken in response to turbulence caused by the U.S. Federal Reserve's plan to slow monetary stimulus - was needed to preserve recovery in Europe.
"The United States and Europe are at different points of the economic cycle. While the U.S. has a more restrictive approach, Europe needs to continue with a more accommodative policy," the EU monetary affairs commissioner said.
FISCAL RULES
While he does not see sufficient support in the euro zone for governments to give up sovereignty on fiscal matters to forge a fiscal union to prevent such crises in the future, Weidmann pressed them to stiffen Europe's fiscal rules.
"To fully unleash the common currency's potential, efforts are needed on two fronts: structural reforms as well as the abolition of implicit guarantees for banks and sovereigns (government bonds)," Weidmann said.
"In addition to stronger rules, we need to make sure that in a system of national control and national responsibility, sovereign default is possible without bringing down the financial system. Only then will we really do away with the implicit guarantee for sovereigns."
The Bundesbank chief also called for euro zone governments to sever what he describes as the "excessively close links" between banks and sovereign governments, saying that European banks hold too many of their own governments' bonds.
"This is because banks do not have to hold any capital against their government debt, as the risk-weight assigned to sovereign bonds is zero.
To counteract excessive investment in sovereign bonds, Weidmann believes that the capital rules need to be changed to take account of risk and exposure levels.
"Only then will banks be able to cope with the repercussions of sovereign default."
Weidmann addressed an economists' conference in Aix-en-Provence, southern France, only three days after the ECB broke with precedent by declaring that it intended to keep interest rates at record lows for an extended period and may yet cut further.
"Monetary policy has already done a lot to absorb the economic consequences of the crisis, but it cannot solve the crisis," Weidmann said in his speech.
"This is the consensus of the Governing Council. The crisis has laid bare structural shortcomings. As such, they require structural solutions."
Weidmann, widely recognised to be the most hawkish member of the ECB's 23-man Governing Council, does not want the bank to intervene too strongly in tackling the bloc's economic crisis, thereby allowing governments to soft-pedal reforms.
He spoke a day after fellow ECB policymakers Christian Noyer and Benoit Coeure said the bank's decision to abandon its customary insistence that it never precommits on policy was a change in communication but meant no change from its strategy, which is based on monitoring inflation, real economy and monetary developments.
"The euro zone is on the mend, it must be at peace, protected, be allowed to heal," Coeure told the same conference on Sunday to explain the ECB's decision to issue such forward guidance, while urging governments to tackle structural problems.
The EU's top economic official, Olli Rehn, welcomed the ECB's move, saying the step - taken in response to turbulence caused by the U.S. Federal Reserve's plan to slow monetary stimulus - was needed to preserve recovery in Europe.
"The United States and Europe are at different points of the economic cycle. While the U.S. has a more restrictive approach, Europe needs to continue with a more accommodative policy," the EU monetary affairs commissioner said.
FISCAL RULES
While he does not see sufficient support in the euro zone for governments to give up sovereignty on fiscal matters to forge a fiscal union to prevent such crises in the future, Weidmann pressed them to stiffen Europe's fiscal rules.
"To fully unleash the common currency's potential, efforts are needed on two fronts: structural reforms as well as the abolition of implicit guarantees for banks and sovereigns (government bonds)," Weidmann said.
"In addition to stronger rules, we need to make sure that in a system of national control and national responsibility, sovereign default is possible without bringing down the financial system. Only then will we really do away with the implicit guarantee for sovereigns."
The Bundesbank chief also called for euro zone governments to sever what he describes as the "excessively close links" between banks and sovereign governments, saying that European banks hold too many of their own governments' bonds.
"This is because banks do not have to hold any capital against their government debt, as the risk-weight assigned to sovereign bonds is zero.
To counteract excessive investment in sovereign bonds, Weidmann believes that the capital rules need to be changed to take account of risk and exposure levels.
"Only then will banks be able to cope with the repercussions of sovereign default."
Countries Spending the Most on the Military
For the first time since 1998, global military spending is down. This coincides with a major decline in U.S. spending, which fell by more than $40 billion between 2011 and 2012. Even with this decline, however, the United States still had a military budget four times larger than China, the next biggest spender.
The major decline in the U.S. military budget was the result of two factors, explained Carina Solmirano, senior researcher at SIPRI’s Military Expenditure and Arms Production Programme. The first is the severe decline in overseas military spending after America’s eight-year war in Iraq ended in 2011, as well as the continued wind down of operations in Afghanistan, Solmirano said.
“The second reason,” said Solmirano, “is purely economics. … The United States is facing a huge deficit crisis, and as part of the agreements in 2011 and 2012, the Department of Defense agreed to start a reduction of expenditure quite a significant reduction.” Solmirano added that barring the emergence of a new conflict, U.S. military spending likely will continue to fall.
Short-term changes in military spending, like the nearly 6% decline in the United States, often go hand-in-hand with periods of economic growth or crisis. Indeed, spending among nearly all the top European military powers, including Italy, France and the United Kingdom, declined last year.
Meanwhile, China went against the global trend by increasing its spending by nearly 8% between 2011 and 2012, and by more than 47% since 2008. Part of this increase is for geopolitical reasons, explained Solmirano, who added the increase in spending has “been parallel to its increase in economic power as well.”
Other nations, while not the biggest spenders overall, have much larger military budgets relative to the size of their economies. As of 2012, the United States spent 4.4% of its gross domestic product (GDP) on the military. In countries like Saudi Arabia and Oman, military costs amounted to more than 8% of GDP. Part of this, explained Solmirano, has to do with the consistently tense security situation in the Middle East. She added that countries like Saudi Arabia are able to fund massive militaries with substantial oil revenue.
24/7 Wall St. reviewed the 10 countries that spend the most on their military in 2012, based on SIPRI’s measure of military spending in more than 130 nations. We also reviewed SIPRI data on military exports and imports, as well as military expenditure as a percentage of GDP. From Globalfirepower.com, we reviewed statistics on military size and strength, based on the most recent available data. We also considered GDP and GDP growth figures from the International Monetary Fund (IMF).
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